Premier and Minister of Finance of the [British] Virgin Islands Honourable Andrew A. Fahie (R1) says the Virgin Islands continues to cooperate with France on an ongoing basis to meet its treaty obligations; however, there appears to be a misunderstanding and possible miscommunication on certain matters, since the Virgin Islands has been blacklisted. Photo: GIS

In a statement Premier Fahie said: “As our treaty partner, we continue to cooperate with France on an ongoing basis to meet our treaty obligations. However, there appears to be a misunderstanding and possible miscommunication on certain matters which we are working with our French partners to resolve.

For the duration of our relationship we have diligently followed the processes laid out in the BVI-France Tax Information Exchange Agreement (TIEA) and will continue to do so. Thus, it is unfortunate that we were included on the French list while working through French requests.

I am confident, however, that all outstanding issues will be addressed within the terms of our TIEA and the BVI will be delisted in due course.

The BVI is a jurisdiction that has always adhered to international standards and maintains good cooperation with jurisdictions around the world.

As a leading international finance centre, our international partners can trust we will continue to do so. We will continue to diligently uphold our obligations and commitment to them, which we take very seriously. I will provide a further update at the appropriate point in time.”

Background to the issue and steps taken by the relevant Competent Authority in the VI:

• The VI’s first introduction to this listing issue was via the announcement by the French Government made on 1 December 2019. There was no engagement that the VI received before December 1, in accordance with Article 12 of the Tax Information Exchange Agreement (TIEA), which details the procedures to be followed to ensure effective exchange of information.

• Immediately following the December 1, 2019 announcement, the BVI’s Competent Authority (CA) contacted the French Competent Authority to determine the root of the issues. To date the French Competent Authority has not responded to these communications in line with the TIEA process, despite a letter from the French Minister to the Premier pledging its engagement and cooperation.

• Furthermore, the French Government has not been able to offer a singular clear basis for the listing of the VI. In fact, the VI has now received three lists which all have differences, one which includes requests for information that date back to 2015.

• It is also important to note that the initial French requests (i.e. those identified in media reports as 230 requests unanswered by the VI) were received in May and June 2017, immediately before the destruction caused by Hurricanes Irma and Maria in September 2017.

• In late 2017, the VI wrote to all jurisdictions where it has Exchange of Information (EOI) relationships - including France - requesting their patience as the Territory recovered from the devastation.

• These particular requests from France pertain to the ‘Panama Papers’ of 2016. The VI registered agent for all those entities affected by the leak was Mossack Fonseca & Co. (BVI) Ltd., but on May 31, 2018 the firm surrendered its Class 1 Trust Licence and is no longer a registered agent in the VI and ceased trading.

• Liquidators appointed by the Eastern Caribbean Supreme Court in the High Court of Justice (Commercial Division) of the VI continue to identify, protect and realise any remaining assets for the benefit of the creditors of Mossack Fonseca & Co. (BVI) Ltd. As such, the Competent Authority wrote to all jurisdictions outlining this process and asked if they could wait until the conclusion of the liquidation process before receiving a response.

• This letter was sent to France on May 15, 2019 and subsequent reminders have been sent concerning every request for information relating to Mossack Fonseca & Co. (BVI) Ltd., entities.

About the TIEA:

The VI has a Tax Information Exchange Agreement (TIEA) with France which was signed in 2009. A TIEA is a bilateral agreement that has been negotiated and signed between two countries’ tax authorities to establish a formal regime for the direct exchange of information relating to tax matters. The VI currently has 28 such agreements with nations around the world.

The TIEA includes Article 12, a commitment to a mutual agreement procedure for the resolution of any concerns.

In addition to its 28 TIEAs, the VI was an early adopter of the Common Reporting Standard (CRS) in tax matters which sees the jurisdiction exchanging relevant information with over 100 countries.